New law establishes fund for fire victims
Newsom signs measure that changes the way state regulates utilities
SACRAMENTO — Gov. Gavin Newsom signed the major wildfire bill he has championed Friday, taking his most decisive step yet to reduce some of the risks surrounding the state’s investorowned electric companies and respond to a crisis he has been dealing with since the start of his term this year.
AB1054, which overwhelmingly passed both chambers of the Legislature this week, takes effect immediately. The bill authorizes a new wildfire fund for claims associated with future blazes started by power lines, mandates safety investments from the major utilities and changes crucial aspects of how the state regulates them, among other provisions.
The fund is expected to be $21 billion, with half of that coming from utility customers through the extension of a charge on their bills that would have otherwise expired. Lawmakers anticipate that the three major utilities will cover the other $10.5 bil
lion through shareholder profits, not rate increases.
“This was a long process, a very inclusive process, and I couldn’t be more proud,” Newsom said as he signed the bill in his office.
The governor also announced that he has chosen Marybel Batjer, secretary of the California Government Operations Agency, to be the next president of the state Public Utilities Commission, which regulates investorowned electric companies. Current president Michael Picker announced in May that he would step down. Newsom called Batjer “one of the best.” He had recently put her in charge of an effort to overhaul the Department of Motor Vehicles, which has struggled with long lines.
At the bill signing, Newsom rejected criticism that the bill had been rushed, saying that the legislation is the result of “hundreds and hundreds of hours and hundreds and hundreds of meetings” that started after he took office in the wake of the devastating Camp Fire that tore through Butte County in November.
“We were sobered by that immediate experience, that reality, and we got to work,” he said.
The bill provides victims of past fires more leverage to secure a deal with Pacific Gas and Electric Co., said Patrick McCallum, a lobbyist who runs Up from the Ashes, an organization that lobbies on behalf of fire victims. That’s because the legislation pushes PG&E to get out of bankruptcy and resolve current claims — without raising rates — by the end of June next year.
“This is a very good piece of legislation,” said McCallum, who supported the bill. “The governor deserves credit, and his staff, for helping make this happen ... and for making it happen fast.”
Jason Buzzard, a Paradise resident who received the first permit to rebuild a home destroyed by the Camp Fire, said he hopes the bill’s supporters are right about what it could mean for others in a similar situation.
“If it helps people get on their feet, and it helps people rebuild and it helps give someone something — especially all the people that lost a family member — that’s important,” he said.
Buzzard, 33, does not know yet whether he’ll sue PG&E. He has until Oct. 21 to file a claim, per an order from the company’s bankruptcy judge.
“The most important thing is getting our lives back in Paradise,” he said.
Newsom laid the groundwork for the legislation shortly after he became governor, when he assembled a team of advisers to study wildfirerelated policy changes not long after PG&E filed for bankruptcy protection. PG&E equipment started the Camp Fire, the deadliest and most destructive wildfire in state history, in November — just after Newsom was elected.
When the governor’s “strike force” released its report in April, Newsom called on the Legislature to act before breaking for its summer recess Friday. Wall Street took the deadline seriously, threatening to downgrade the credit ratings of Southern California’s major investorowned utilities if Sacramento did not make substantial changes to utilities’ wildfire liabilities by then.
But the governor downplayed the impact of threatened creditrating downgrades for the utilities, saying the July 12 deadline he set was important “for no other reason” than lawmakers are starting their recess and “we are in the middle of wildfire season.”
He said the ratings agencies had set a March deadline, and state leaders met with the agencies then to ask for more time.
Lawmakers nonetheless took the deadline seriously.
They released the initial language of AB1054, technically an amended version of an earlier piece of legislation, on June 28 — one week after Newsom’s office unveiled its plan to address the wildfire problems of PG&E, Southern California Edison and San Diego Gas & Electric. The bill was amended the following week, and was passed by the Senate on Monday and the Assembly on Thursday.
While some critics objected to the speed with which the bill cruised through the Legislature, supporters ultimately had little problem mustering the supermajority necessary to pass the sweeping measure.
Among the few votes against it was San Francisco’s entire legislative delegation: Sen. Scott Wiener and Assemblymen Phil Ting and David Chiu. The three Democrats objected to amendments that will increase regulatory oversight if parts of a utility are sold, thereby making it more difficult for San Francisco to buy PG&E’s power lines if the city decides to follow through on that idea.
Newsom swiftly dismissed those concerns, saying, “I don’t think there’s much of an issue.” He said wildfire legislation that passed last year probably did more to complicate such a purchase of utility lines.
Newsom said the bill is just “one phase” in the response to catastrophic wildfires, and that his administration will work with lawmakers when they return in August on proposals dealing with home insurance and efforts to protect homes against fire embers.
“Yes, we have more work to do,” he said. “Yes, we are sobered by the enormity of the task at hand.”
Shortly before Newsom signed the bill, PG&E announced that it has activated a new system to detect wildfires using satellite technology. The system has been in the works for several years, PG&E said.